In 2008 the banks crashed. States round the world bailed them out by borrowing money. Inevitably, this did not get rid of the crisis but rather gradually transmuted it into a crisis of the creditworthiness of individual states: today the crisis of Eurozone state creditworthiness threatens a new bank melt-down (which may already have happened by the time of this weekend school).

The ‘solution’ demanded by governments and the media is austerity. Creditors – ‘savers’ – must not be made to accept the losses: the working class, both in and out of paid work, must do so. Predictably, the result is an economic downward spiral – as seen in Greece, but coming now to the rest of Europe.

The ‘Occupy’ movement has represented a cry of rage but not put forward a clear alternative. The broad left, including the far left, has committed itself to Keynesian ideas – that states should borrow more and spend more and hope by doing so to grow ‘their way out’ of the crisis.

Understanding the unfolding crisis and proposing real alternatives requires us to grasp Karl Marx’s critique of political economy. But while education in the basics of Marx’s ideas was commonplace on the far left in the 1970s, today it has withered away: there are academics and theorists who ‘do’ political economy, while left activists and groups ‘do’ only campaigns.

Our school aims in a small way to contribute to beginning to overcome this gap in the education of the left. We are therefore seeking to address fundamentals rather than to tackle the analysis of the crisis directly.

The financial system is at the centre of the present crisis. But what is the underlying basis on which the luxuriant overgrowth of financial institutions and instruments has grown up?

Hillel Ticktin is the editor of Critique journal. He has written numerous articles on finance capital and the ‘financial turn’ of the 1980s and its consequences and on the shape of the present crisis.

Werner Bonefeld

3. Political economy and the state – Werner Bonefeld

Keynesian and nationalist ‘solutions’ to the present crisis rest in the last analysis on the illusion that the nation-state stands above classes and can ‘manage’ the monetary and financial system so as to overcome the crisis. How does the state relate to the capitalist economy?

John Maynard Keynes’ General Theory of Employment, Interest and Money (1936) was a muddled partial critique of the ‘orthodox’ economics of his day while remaining within the fundamental ‘orthodox’ ideas of marginal utility and equilibrium – though full of striking phrases. Its assumptions are deeply nationalist. Keynesianism is popular among opponents of the policy of austerity because it seems to have ‘worked’ in the 1950s and 60s. It seemed to do so, in reality, because of the results of World War II.